IN Scorpene Submarines - News & Discussions

Discussion in 'Indian Navy' started by LETHALFORCE, Aug 30, 2009.

  1. Yusuf

    Yusuf GUARDIAN Administrator

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    Doing the math, a 2000 crore hike on 18,000 crore is not double the original cost is it? Crappy journalist.
     
  2. kuku

    kuku Respected Member

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    There are no light weight estimates in contracts this big, these are based on some very real calculations.

    When that goes wrong we have a gorshkov disaster.
    Kind of strange when you consider that
    - delay is not a reason for this price hike.
    - seller can only increase the price w.r.t the terms of payment.
    - the price hike is one of the reasons for the delay.
    Every government project has to meet the budget alloted to it, this might have been a way to avoid that, or may be somehow magically the rates have doubled in four years.
     
  3. kuku

    kuku Respected Member

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    Scorpene project will cost Rs 2,000cr more - India - NEWS - The Times of India
     
    Prometheus likes this.
  4. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Dude. I am not saying otherwise. What I am saying is this is calculated based on current market dynamics of the time and scaled up as time passes until completion of the final price for the contract. Before a contract is signed, there are a number of estimates made and changed over time.

    Gorshkov was completely different. They messed up on the initial study itself. We signed a contract based on a whim and the "estimate" of the work left.

    A delay is always a reason. Also we do not know what modifications were made to the parts being sourced. It could be a good thing or a bad thing.

    Similarly the Su-30 MKI upgrade will become more expensive because of the new AESA radar and a smart skin concept that is to be applied. Sukhoi also increased the appreciation from 2.55% to more than 5% because of delay in the project. That's one reason why we need to go indigenous.
     
  5. kuku

    kuku Respected Member

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    From the different contracts involving public and government sector companies that i worked on they genrally have the price escalation covered in the contract (the reasons include delays).
    If the current contract is due to a error in estimation of price increase (as DCNS was quoting near 2020 as project completion date in 2005).
    A delay could be a reason, all i am saying is that it seems very odd that the parts to be supplied jumped to near double costs in 2 to 4 years.

    Well that wil have to be clear.
    Could you provide a source for that?

    From what i know, Sukhoi incresed the costs due to similar reasons increase in prices of the equipment they had to manufacture and supply to HAL (instead of a delay in the construction phase).
     
  6. mattster

    mattster Respected Member Senior Member

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    Procurement Mess - India needs to overhaul its procurement procedures seriously. The real problem here is not the French its the screwed-up decision making Indian beaurocracy that takes 15 years to acquire a Hawk Trainer and 10 years to get a Scopene submarine.

    Any defense equipment vendor is going to increase the price if it takes 10 years to close the deal.

    Are Indians really so freaking incompetent that this process cannot be made more efficient. About a 100 IAF PILOTS CRASHED AND DIED in 10 years because they could not get decent trainers. This is probably the most in the world and a world record for any air-force that is not involved in a war. Its a disgrace that they cannot seem to overhaul this uselessly slow incompetent system.

    Every major arms procurement becomes a national joke in India. Either its corruption & kickbacks or its endless decades long delay.

    Maybe we Indians are inherently corrupt and nothing will change that !!!
     
  7. ajay_ijn

    ajay_ijn Regular Member

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    there was a talk about legalizing the middlemen agents, who actually broker the deal between companies and babus. This is getting delayed by years in most cases because CBI and other organisations take lot of time to find out about middlemen in these deals.
     
  8. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    The French tells India has the right to have nuclear submarine, The Scorpene is an SSN design with a conventional power plant. Is there anything fishy or am I just speculating?
     
  9. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    That reason is included. The other reasons were: Delay of 6 years in integrating Israeli equipment on the MKI. Rising dollar rate compared to Rouble and very high inflation in Russia. It was the delay and rising prices that mainly lead to the appreciation. All this was before recession.
     
  10. wild goose

    wild goose Regular Member

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    Mate,

    There is some thing fishy in their offer to Brazil also I think. I have read some where that Brazil is thinking about a nuclear sub and scorpene in the same frequency. I will try to post the link/article if I come across that.

    There should have been a very valid reason for IN to go for Scorpene when U214 option was also there.
     
  11. wild goose

    wild goose Regular Member

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    Global Insight

    December 24, 2008


    Brazil Signs Landmark Arms Deal with France

    Juliette Kerr

    Brazil is to acquire French military equipment and technology, worth some $12US billion, highlighting its aspirations to be recognised as an emerging regional and global leader.

    Dreaming of a Nuclear Submarine

    Following their meeting within the framework of the European Union (EU)-Brazil talks earlier this week, French president Nicolas Sarkozy and his Brazilian counterpart Luiz Inacio Lula da Silva yesterday signed a landmark $12US-billion arms deal, the first tangible outcome of the declared strategic alliance between the countries. Under the deal, France will sell Brazil four conventional Scorpene submarines and 50 EC-725 helicopters, but assembly of submarines and helicopters will be done locally. Brazilian companies, including Odebrecht, will work together with the French Direction des Constructions Navales Services (DCNS) to build a shipyard in Rio de Janeiro where the submarines will be assembled. The helicopters will be assembled by Helibras, the Brazilian subsidiary of the EADS-owned Eurocopter, with first deliveries scheduled for 2010. French technology will bring Brazil also closer to realising its old dream of becoming the first Latin American country to operate a nuclear submarine. Under the deal, DCNS will deliver the non-nuclear technology, while Brazil remains responsible for the nuclear parts of the project, including a planned $880US-million nuclear reactor.

    In addition to the four Scorpene diesel-electric submarines, the French-operated yard will build a fifth boat which will be fitted with a Brazilian-designed nuclear power-plant.


    Just the relevent part taken from http://www.worldaffairsboard.com/in...2-brazil-signs-landmark-arms-deal-france.html
     
  12. RPK

    RPK Indyakudimahan Senior Member

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    PAC to take up tainted Scorpene submarine deal for debate

    New Delhi: Parliament's Public Accounts Committee is scheduled to take up the alleged financial "advantage" given to a French company while concluding the Rs 18,798-crore Scorpene submarine deal.

    The Committee, at its meeting on Tuesday, would go into the report of the Comptroller and Auditor General relating to "undue favour to vendor in acquisition of submarine," Parliament sources said.


    Defence Ministry officials would also give oral evidence on the issue before the Committee, headed by expelled BJP leader Jaswant Singh.

    Bogged down by kickback charges, the Scorpene submarine deal came under criticism from the CAG for the delay involved and the financial "advantage" given to the French company.

    In its audit report tabled in Parliament in July, the CAG came down heavily on the Defence Ministry for the nine-year delay in concluding the contract.

    It also slammed the "undue financial advantage" shown to the French company, which hiked the price by Rs 2,838 crore despite the vessel's design being unproven.

    The CAG report for 2008 had said Indian Navy's projected requirement for a submarine fleet was approved in 1997, but the contract with Armaris, a joint venture of DCN and Thales, was done only in October 2005.

    The CAG had noted that the project to construct six Scorpenes at Mazagon Dockyards Limited (MDL) had already slipped two years behind schedule, though the delivery of the submarines was fixed between 2012 and 2017.

    "The contractual provisions resulted in undue financial advantage to the vendor of a minimum of Rs 349 crore, besides other unquantifiable benefits," the report had said.

    India also extended to the vendor "wide ranging concessions" on warranty, performance bank guarantee, escalation formula, arbitration clause, liquidated damages, agency commission and performance parameters, it added.

    The Committee is also expected to look into the performance audit report relating to the Midday Meal Scheme and listen to the oral evidence from officials of the Ministry of Human Resource Department.

    The BJP and its ally Shiv Sena had boycotted the first meeting of the PAC in September and asked Jaswant Singh to quit the post. But Singh has refused to put in his papers.

    BJP faced an embarrassing situation when Singh rejected its request to step down from the post after he was expelled from the party on August 19 following controversy over his book on MA Jinnah.

    As per rules, he cannot be removed unless the Speaker finds him unable to discharge his duties.
     
  13. Atul

    Atul Founding Member

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    IN will face its biggest night mare by 2012, when it will be on a all time low on Sub's.

    Government has to act fast (leasing a few Russian - kilo class / German - U-209 or Italian Subs can be a answer for the same). what ever the choice, a decision has to be taken. that to immediately.
     
  14. venom

    venom DFI Technocrat

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    The one big mistake India does in defense procurement is that we think of just long term plans.......Wat about the short term & immediate requirements & a matter of fact our long term plans fails like anything or faces delays for which we come up with some other long term plans [U-209],Ac's[The concept was initiated in 1993],even the Su-30Mki 230 by 2014 with contract signed in 1998.The difference is 18 years,while the last aircraft has entered service,the 1st aircraft[inducted in 2002] would have already spent around 40% of its life.Why does India want 2 manufacture all 140 air crafts in India only.Why not build some 60 in India & the remaining 80 in Russia.We can send our engg & technicians to Russia where they will be working on the project & absorbing the technologies there.I know it would add some cost but it is justified as we are dealing with our national security.Same is the case with MMRCA,out of 126 ofly 18 will be procured directly & 108 will be manufactured in India.Name a single indigenous which has not faced problems & delays in India.
     
  15. RPK

    RPK Indyakudimahan Senior Member

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    PIB Press Release

    Delay in building Scorpene range submarines at MDL

    As per contract signed with Mazagaon Docks Limited (MDL), first Scorpene submarine is scheduled to be delivered in December 2012 and thereafter, one each every year till December 2017. On account of some teething problems, time taken in absorption of technology and delays in augmentation of industrial infrastructure and procurement of MDL purchased materials (MPM), slippage in the delivery schedule is expected. Delay in scheduled delivery of submarines is likely to have an impact on the envisaged submarine force levels. Loss on account of the delayed delivery is difficult to quantify at this stage.
     
  16. bengalraider

    bengalraider DFI Technocrat Stars and Ambassadors

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    Delay in building Scorpene range submarines at MDL
    14:29 IST
    /RAJYA SABHA/

    Great he knows we are going down in submarine force levels and he has said that the scorpene is going to be delayed, but as the defense minister what is he going to do about it?isn't it his job to see force levels are not compromised!
     
  17. bengalraider

    bengalraider DFI Technocrat Stars and Ambassadors

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    Given its two nuclear armed neighbours and border disputes with both, its ‘No First Strike’ nuclear weapons policy, and the expectation that the Chinese Navy will be able to deploy a Carrier Battle Group (CBG) and at least one to two SSNs in the Indian Ocean region (IOR), by about 2025, India would need the following:
    • Four to Six SSBNs (depending on Reactor-based operating cycle, which I will explain later) with an SLBM (Submarine launched ballastic missile) range of about 4500 to 5000 Kms.

    • Six to 12 SSNs (depending on Reactor-based operating cycle) for choke point control, shadowing and area sea denial operations.

    • 18 to 24 Conventional subs with AIPS (Air Independent Propulsion System) for conventional warfare roles.

    • Two aircraft carriers, six Fleet Replenishment tankers, 24 Frigates/Destroyers, 12 corvettes and 12 long range OPVs, and relevant aviation assets (afloat and ashore).

    • Six midget submarines of about 250 tons for shallow water and anti-terror Special Forces operations.

    • Amphibious ships, minesweepers, patrol boats, missile boats.

    • Marine Commandos and Marine Forces

    • Two (one for each coast) modern air transportable SRS (Submarine Rescue Systems) with integral decompression systems.

    Source:
    Sharks of steel
    Indian Navy’s submarine force levels need immediate attention
    By Vice Admiral Arun Kumar Singh (retd)
    FORCE - A Complete News Magazine on National Security - Defence Magazine
     
  18. enlightened1

    enlightened1 Member of The Month JANUARY 2010

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    Ajai Shukla / New Delhi December 19, 2009, 0:38 IST

    An air of resignation hangs over the East Yard, a giant workshop shed in Mumbai’s Mazagaon Dock Limited (MDL), where six Scorpene submarines are to be fabricated for the Indian Navy. Two years ago, when Business Standard visited this facility, it hummed with activity as welders assembled the hull of the first Scorpene, which was to join the Indian Navy in 2012.

    Since then, rumours of delay, by as much as two years, have swirled around Project 75, under which the Scorpenes have been acquired. Business Standard has learnt that work on the first Scorpene has ground to a halt, and it is unlikely to be ready before 2015.

    Most disquietingly, the delay is due to a contracting blunder, stemming from the Ministry of Defence’s propagation of a myth that significant parts of the submarine were being built with Indian components.

    This led the defence ministry to create a special category called Mazagaon Procured Materials, or MPM. Of the total project cost of Rs 18,798 crore, Rs 2,700 crore (¤400 million) were set aside for MDL to contract directly for submarine materials. But the impression created, by giving MDL a budget for locally procuring materials and systems from multiple vendors, was false. The bulk of MPM budget, as the defence ministry knew, would go straight to a single vendor — French company Armaris, with whom India signed the Scorpene contract. This would pay for critical submarine systems, including the engine, the generators and special submarine steels.

    There was no question of competitive bidding for these items.

    Since they affected crucial aspects of Scorpene’s performance, such as noise levels, they had to be bought from the original vendor, Armaris, for performance guarantees to be valid.

    It is not clear why the defence ministry left these crucial Scorpene systems unpriced. What is clear is that French company DCNS, which took over Armaris in 2007, is now demanding close to Rs 4,700 crore (¤700 million) for these items, almost twice of what was budgeted.

    Minister of State for Defence Pallam Raju told Business Standard that DCNS based its higher demand on cost inflation since the contract was signed in October 2005. The MoD asked the French government to intercede with DCNS, but Paris is unwilling to help.

    “We expect the French government to play a role to ensure it (the MPM items) is not priced abnormally high. We understand their need to make profit, but the price should not be abnormally high. We feel the French government is shirking its responsibility,” said Raju.

    The MoD pleaded its case with a number of French officials, but in vain. “I visited Paris (in June 09) and I had a meeting with DCNS. They assured us they would hold our hand, but we are not getting that comfort level. I projected [the case] to the French defence minister as well. [In November] We had a senior French MoD bureaucrat… come [to Delhi] and I reflected it to him as well,” said Raju.

    The MoD blamed DCNS’ takeover of Armaris for further complicating the negotiations. But that does not answer why a contract that took nine years to finalise failed to fix the price for materials worth Rs 2,700 crore.

    Senior naval officers familiar with the negotiations said, “The inclusion of so many crucial systems in the MPM package — systems that everyone knew had to be bought from Armaris/DCNS — was a grave contracting mistake. This was done to give the impression of greater indigenisation… since these would apparently be items that MDL was procuring. But this scheme has backfired badly.”

    Naval planners are struggling to deal with a situation where the induction of Scorpene submarines remains a long way off. Only after the MoD and DCNS agree on a price that production would begin in France of the engines, generators and other systems that are included in MPM category. Technicians working on Project 75 estimate that, once a price is fixed and a contract signed, it will be 33-36 months before the items are delivered to MDL and fitted on the first Scorpene. Thereafter, the painstaking process of outfitting the rest of the vessel, fitting weapons and sensors and carrying out lengthy trials would begin before handing over the submarine to the Navy.

    But work at East Yard has not entirely stopped. Having completed the first hull, MDL is going ahead with fabricating the second and the third. Officials involved in Project 75 say this will allow submarines to be delivered at nine-month intervals, rather than the planned 12 months.

    Until MPM contract is signed, and the systems delivered, MDL’s East Yard will not be producing submarines, but 200-foot metal tubes for a project that began two decades ago, and gradually became a symbol of ineffective defence planning.
     
  19. mattster

    mattster Respected Member Senior Member

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    INCOMPETENCE and the "offset clause" combine for a disaster.

    This MOD department is just not run very well...is it ??
    A. K. Anthony should be fired for this mess !!

    When is India going to learn that this "offset clause" needs to be 2nd priority to the induction of key strategic defense platforms.

    The "offset clause" cannot be an "all or nothing" type of policy.
    There has to be flexibility of implementation, based on the local industry capability, and the urgency of the weapon system.

    These MOD guys keep repeating the same mistakes over and over again.
    They cant seem to learn from their mistakes and improve the process.
     
  20. venkat

    venkat Regular Member

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    Preparing a defence contract in indian scenario is a perfect example for the too many cooks saying! Everybody will add their own masala,especially the middlemen,vested interests, asking for this and that and ultimately getting nothing and paying up bloated prices for a dud.Admiral gorshakov fiasco has started the trend and france is promptly following it up!
     

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